This is an archived article that was published on sltrib.com in 2014, and information in the article may be outdated. It is provided only for personal research purposes and may not be reprinted.
Federal regulators have fined a Roy man and his Ogden company $1 million and ordered him to repay customers $641,000 for defrauding Japanese citizens in a foreign exchange contracts trading operation that investigators said had characteristics of a Ponzi scheme.
The Commodity Futures Trading Commission imposed the penalties on Scott A. Beatty of Roy and his Peak Capital Management Group Inc.
Beatty committed fraud, lied to the commission and was not registered to trade, the commission said in an order issued Tuesday.
Reached by phone, Beatty declined to comment. Beatty agreed to a settlement with the commission in which he did not admit to the allegations but that also does not allow him to make public statements that contradict the findings.
Beatty, through the website http://www.peakforex.com, solicited $825,000 from 49 Japanese citizens from January of 2011 to April of 2014 by falsely claiming he was an experienced trader who earned returns as high as 43.9 percent.
However, of the $825,000 Beatty received, he lost $71,000 trading, returned $184,000 in capital to customers and another $53,000 in purported profits but what regulators say were Ponzi-like payments to make the operation appear successful.
Beatty used the remaining $517,000 for personal expenses, including car payments, other retail purchases and travel, the commission found.
Then, in response to subpoenas, Beatty lied to the commission about his activities, the order says.
Besides the fine and restitution, the order imposed a lifetime trading ban on Beatty and Peak Capital Management Group Inc., which was registered as a Florida corporation but doing business out of Ogden.